| Donald Trump is readying himself to walk the presidential plank later this year. That’s why it makes sense that his administration would announce a ban on issuing any more H-1B, H-2B, and L-1 visas till 31 December, 2020. Now, such news was bound to shock the Indian IT services sector to the core. Just last year, Indians made up a whopping 71.7% of all immigrants who’d applied for fresh H-1B visas or renewals, according to a report by credit ratings agency ICRA. |
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| (Source: ICRA) |
| But Indian IT services firms like Infosys, Wipro, and TCS have kept a close watch on the US government’s hardening stance against immigration. And acted accordingly. |
| According to Kotak Institutional Equities more than half of Infosys, Wipro Ltd and HCL Technologies Ltd’s workforce deployed in the US are hired locally. This reduces the dependence on visas, although it does impact margins. Why Trump’s visa restrictions will have limited impact on Indian IT companies, Mint |
| If Indian IT firms saw this shift coming from a mile, the US tech firms that are the biggest employers of H-1B visa holders, hadn’t really prepared for the talent gap this new policy will spawn. They have summarily slammed the US government’s decision. There’s going to be a disproportionate talent fallout at Google, Facebook, and Amazon. The shoe, as they say, is on the other foot. |
| Sheela Murthy, founder, Murthy Law firm, an immigration firm in the US, said…that this shift would only hurt the US economy as not only Indian firms but also top US tech companies will look at countries like India to set up offshore centres. The scenario is not too far off going by the recent H-1B approval rates. The top five US tech companies’ dependency on H-1B had increased 43 percent, whereas India’s dependency decreased by 50 percent over the last couple of years. H-1B visa ban may not make that big a dent in top IT firms’ revenues, Moneycontrol |
| The best illustration of just how much the US might lose out through its hardened immigration policies is this image. |
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| The US bar graph tells a story of a nation built on the back of progressive immigration policies. A reversal in policy may end up hurting the US more than it does countries like India, which can now count on more offshoring of talent. |
| Newspaper PDFs, platforms and intermediary liability Rohin We’ve written about newspapers in India getting PDF-ed before. When physical delivery got severely curtailed due to lockdowns, many publishers tied up with any consumer platform with reach (like payments platform Paytm or apartment community app MyGate) to give away their entire newspapers as free PDFs. Just to ensure readers didn’t lose their newspaper reading habit. “Habits eat piracy for breakfast,” we’d written. Sadly, the PDF solution could turn out to be a problem. Inc42 looked into a court case filed last month by Dainik Jagran, India’s most read newspaper with over 20 million readers per issue, against messaging service Telegram over the distribution of its newspapers as PDFs. |
| The lawsuit said 10 Telegram channels publicly broadcast the PDF to its members. In Telegram, there’s no limit on the number of members in a channel and new members can see the entire message history for any channel on joining. The Telegram channels identified by Dainik Jagran were said to be uploading PDF format of the publication’s Hindi newspaper on a daily basis. This allowed channel subscribers to have free access to the newspaper’s content current and past editions, which are otherwise only available to paid subscribers. According to Jagran, “(It) caused serious financial loss to the publication and also violated the trademark rights as well as copyrights in the e-newspaper.” Dainik Jagran Vs Telegram Revives Platform Liability Debate Over Newspaper PDFs, Inc42 |
| While the channels in question have since been deleted, the focus has since shifted to Telegram instead, especially because it appears it chose not to respond to Dainik Jagran’s complaints. |
| The high court, on May 29, asked Telegram to disclose the identity of these Telegram channel owners and also take down the channels contributing to the alleged copyright infringement. Dainik Jagran argued that Telegram cannot escape liability of these channels under Section 79 of the Information Technology Act because an intermediary is required to conduct due diligence on being informed about the misuse and pull down the channels within 36 hours. But in this case, Telegram did not respond to the four notices and reminders sent by Dainik Jagran, the company alleged. Dainik Jagran Vs Telegram Revives Platform Liability Debate Over Newspaper PDFs, Inc42 |
| Internet platforms are typically absolved of liability thanks to “safe harbour” laws, which treat them as mere intermediaries. These also include telecom firms, like Reliance Jio, which last week told an Indian court that it was not liable for any “unlawful activity” committed by its users. “Under Section 79 of the IT Act, intermediaries are exempt from liability under the Act in respect of any third-party information, data, or communication link made available or hosted by them,” Jio told the court as its response to a case filed by Paytm. But just last year, the same Jio had submitted a detailed filing arguing against blanket safe harbour to intermediaries. Jio argued for a severely more restrictive treatment of intermediaries, including making them more liable for the actions of their users. Scroll to page 471 in this PDF to read Jio’s submissions. What changed Jio’s mind from last year to this? |
| Go east, past China, to Japan Rohin The two biggest pools of venture and corporate capital in the world are the US and China. But with Chinese capital becoming unwelcome in light of India’s border conflict with China (which left 20 Indian soldiers, and an unspecified number of Chinese, dead), Japanese capital and investors are being viewed in a new light. The Nikkei Asian Review talks about early attempts by Indian startups and industry associations to court Japan. |
| The effect of anti-China sentiment is already being felt across the industry. Indian startups have raised $17.9 billion this year, according to figures compiled up to June 15 by Indian research firm Tracxn. But that figure included $13.7 billion raised by Reliance Jio Platforms, the telecoms business of billionaire Mukesh Ambani. Factoring out that megadeal, the remaining $4.2 billion puts the pace of fundraising far behind last year’s $15.1 billion. Most of the investment in Reliance Jio Platforms came from U.S. investors, such as Facebook and private equity companies KKR and Silver Lake. But Japan is also emerging as another key player, especially for young startups, as a growing number of companies look outside their home market for innovation. Indian startups court Japan to fill funding gap and skirt China, Nikkei Asian Review |
| There’s just one issue. Some of the biggest bets made by Japanese investors in India have gone down the drain. |
| Japanese companies have a rocky history of investing in India. Two major deals more than a decade ago — Daiichi Sankyo’s 500 billion yen (around $5.1 billion at the time) acquisition of pharmaceutical company Ranbaxy Laboratories in 2008 and NTT Docomo’s 250 billion yen investment in a telecoms business of Tata in 2009 — led to bitter legal disputes and are widely regarded as cautionary tales. Indian startups court Japan to fill funding gap and skirt China, Nikkei Asian Review |
| When life gives you Covid, make rubber gloves Jon The first major IPO in post-pandemic Thailand has a distinctly Covid-19 flavour. Rubber glove maker Sri Trang Gloves Thailand is set to raise 14.9 billion baht ( US$480.34 million). Thailand is the world’s biggest maker of rubber, and that has enabled this listing, which will go towards paying off debt. |
| The rubber glove maker, a subsidiary of the country’s biggest natural rubber producer Sri Trang Agro Industry Pcl , booked revenue of 3.79 billion baht in the three months ending in March, up 25% from 2.98 billion baht a year ago, according to the filing. The increase was driven by rubber glove sales of 6.2 billion pieces, up 28.7% from the same period a year ago, and new production lines and factories in southern Thailand. The company said sales had increased partly due to the COVID-19 pandemic. Gross profit nearly doubled in the first quarter this year, jumping 79.7% to 706.6 million baht, also helped by lower oil prices. Thai rubber glove maker Sri Trang plans IPO to raise $480 mln, Reuters |
| Green is good for billionaires Seetharaman Indian billionaire Gautam Adani’s eponymous conglomerate got a new flagship company on Tuesday, going by market value. Adani Green Energy edged past Adani Ports and Special Economic Zone to become the Adani Group’s most valuable company. It closed the day with a market capitalisation of Rs 72,500 crore (US$9.6 billion), compared with Adani Ports’ Rs 72,300 crore (US$9.58 billion). It even broke into the top 40 among listed companies. All unthinkable even a few weeks ago. The company’s shares have been on a tear lately, nearly doubling over the past month, helped by a Rs 3,700 crore (US$490 million) investment from French energy company Total SA in a solar project. An 8 GW solar power tender Adani Green Energy bagged recently took its total portfolio to 15 GW, making it India’s largest clean energy company. While these developments have certainly enthused investors, their optimism also has to do with the general outlook for renewable energy companies in India and around the world. The shift from coal-fired power to solar and wind energy has been accelerated by the pandemic. |
| In a report, the IEA (International Energy Agency) said the most severe plunge in energy demand since the second world war would trigger multi-decade lows for the world’s consumption of oil, gas and coal while renewable energy continued to grow. The steady rise of renewable energy combined with the collapse in demand for fossil fuels means clean electricity will play its largest ever role in the global energy system this year, and help erase a decade’s growth of global carbon emissions. Covid-19 crisis will wipe out demand for fossil fuels…, The Guardian |
| Countries like India make it mandatory for utilities to absorb whatever clean power is produced and reduce a proportionate intake of conventional power. As a result, the contribution of clean power to total electricity generation has seen the steepest climb in India during the lockdown. |
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| Source: Nelson Mojarro/IEA, World Economic Forum |
| So, it’s not surprising that Adani Green Energy’s dream run comes at a time when the group’s thermal power company, Adani Power, is trading at half its 52-week high, making it cheap enough for Gautam Adani to take it private. |
| India’s China detox is India’s China tax Rohin India wants to get rid of anything Chinese from its economy these days, after a bloody border fight that left 20 of its soldiers dead. One sector discussed most commonly is consumer electronics, which is dominated by Chinese brands that sold products worth nearly US$20 billion last year. In the smartphone space, the share of Indian companies is a ridiculous 1%. An editorial in the Economic Times floated an even more ridiculous solution—the setting up of massive government-owned electronics companies. Widely-regarded economist Rathin Roy was asked about the matter of India’s China boycott in an interview by Arup Roychoudhury of the Business Standard. Here’s Roy’s response, with the emphasis mine. |
| Q. The Prime Minister has called for ‘Aatmanirbhar Bharat’, and the recent tensions have led to calls to boycott Chinese goods. Can we actually do that? A. We are not buying Chinese goods today out of any love for China. Why are even our sewing needles manufactured in China? We are not able to manufacture even low-end products as cheaply as China is. And therefore it is a rational economic decision to buy something from somewhere when it is sold as cheaply as possible. If you choose not to do that, then your economy becomes more expensive and then your growth falls, and you lose. You have two options. Either you accept that you are going to become a more expensive country, or you put in place a plan to produce the things you take from China, more cheaply in India. India has been in a situation where we can produce high-end products for our consumers, but when it comes to mass market items, we are uncompetitive, compared to other countries, not just China. We have to grow up and do much more than just, in a fit of childish pique, say that we are boycotting Chinese products. We will have to put the hard work in to make things here that people of India want to consume and reduce our dependence on the rest of the world. We have to recognize that you cannot compete with China when so much of your GDP comes from low-end services. Our imports are driven by pure economics, not love for China: Rathin Roy, Business Standard |
| Will India choose to become a more expensive country, or put in place plans to become as competitive and cheap as China? India’s Commerce and Industry Minister, Piyush Goyal, gave a hint. |
| The dragon ate my gear Savio Continuing with the anti-“Made in China” sentiment, let’s see how it affects the sports industry, which is reeling perhaps more than most given there is no concrete timeline for live events to resume. For any sport. When they ultimately do, they might have another concern, perfectly summarised by this chart in the The Indian Express. |
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| So, “Make in India”. |
| But India’s reliance on China goes deeper than importing finished products, say officials and players. Domestic manufacturers, who mainly export hockey sticks and balls, cricket bats and balls, boxing equipment and chess boards, among other items, “depend a lot” on raw material from China. Vikas Gupta of Soccer International, a Jalandhar-based export house that manufactures the Vector brand of footballs, volleyballs, basketballs and rugby balls, says they import polyurethane and ethylene-vinyl acetate foam from China for their products. “The raw material quality in India is not good and we cannot reach the desired standard to export our products to major markets in Europe and USA as well in India. Chinese manufacturers provide us with high-quality raw material at a very competitive price,” he says. China boycott call rattles sports market: ‘Can’t suddenly do it’, The Indian Express |